The US crude is expected to emerge as the primary beneficiary of this bilateral trade deal with the US, potentially accounting for up to ~10% of India’s crude intake. According to the industry analyst, this will largely displace lighter West African grades rather than Russian supply. According to commodity market analytics firm Kpler, Venezuelan crude may reappear opportunistically, but volumes are expected to remain episodic and constrained by weaker economics, sanctions compliance, insurance, and blending requirements.
India and the US late Tuesday night announced a bilateral trade deal that includes a reduction in tariffs from 50% to 18% on Indian goods exported to the US. The US President said both countries aim to expand bilateral trade to $500 billion. He also mentioned that India has agreed to stop buying Russian oil and instead purchase much larger volumes from the US, and potentially from Venezuela. Trump said that India committed to “BUY AMERICAN” at a much higher level, including purchases of over $500 billion worth of US energy, technology, coal, agriculture, and other products. Prime Minister Narendra Modi said that Made in India products will now face a reduced tariff of 18%.
“Instead, the trade deal reinforces India’s ongoing diversification strategy at the margin. US crude is emerging as the primary beneficiary, potentially accounting for up to ~10% of India’s crude intake, largely displacing lighter West African grades rather than Russian supply,” said Sumit Ritolia, lead research analyst, refining & modeling at Kpler.
He further added that the trade deal is unlikely to result in a near-term reduction in India’s Russian crude imports. According to him, Russian volumes remain largely locked in for the next 8–10 weeks and continue to be economically critical for India’s complex refining system, supported by deep discounts on Urals relative to ICE Brent.
“Imports are expected to stay broadly stable in the ~1.1–1.3 mbd range through Q1 and early Q2, with any recent moderation offset by higher Middle East inflows rather than a structural shift away from Russian barrels. Refiners are technically capable of operating without Urals, but a rapid disengagement would be commercially challenging and politically sensitive, making any policy-driven recalibration gradual rather than immediate,” he added.
India imports nearly 88% of its crude oil requirements from over 30 countries, with Russian crude accounting for the largest share of the basket since the Russia–Ukraine war began in 2022. Venezuela holds the world’s largest proven oil reserves, estimated at about 303 billion barrels, but its crude oil production is only around 1 million barrels per day, roughly 0.8% of global output. India was once a major buyer of Venezuelan heavy crude, importing more than 400,000 barrels per day at its peak. However, purchases stopped in 2020 after US sanctions made trade increasingly difficult. According to Kpler data, Indian imports of Venezuelan crude were strong between 2013 and 2016, rising from about 400,000 barrels per day to nearly 500,000 barrels per day.
“For the Indian refining sector, there are ample avenues including the US, to purchase crude as Russian crude accounted for less than 2% of Indian crude imports prior to FY2023. The discounts on Russian crude oil were marginal prior to the US announcing sanctions on some Russian crude suppliers in October 2025, and ICRA estimates that replacement of Russian crude with market priced crude would lead to an increase in the import bill of the country by less than 2%. Additionally Venezuelan crudes are heavy and sour and therefore cheaper and would be of interest to Indian refiners, many of whom can process these types of crudes,” said Prashant Vashist, Senior Vice President and Co-Group Head, Corporate Ratings.